Covid-19 has had severe impacts on pharma industry

by Inside Logistics Online Staff

NORTH READING, Mass. – The pharmaceutical industry has been severely impacted by Covid-19, citing significant challenges with drug shortages, limited access to critical medicines, increased production costs, and heightened concerns around drug counterfeiting, diversion and theft.

A new study by IDC White Paper, “Supply Chain Agility in the Pharmaceutical Industry,” surveyed 532 global supply chain leaders across organizational levels and functions in pharmaceutical companies, wholesale distributors, hospitals and pharmacies.

The study highlights systematic issues in the resilience of the pharmaceutical supply chain as the industry braces for a third wave of the pandemic and prepares for safe, worldwide distribution of Covid-19 vaccines, testing, and treatments.


Drug shortages are the top challenge faced by supply chain leaders, with growing concerns around diversions and counterfeits. Almost half (46 percent) of respondents experienced drug shortages during the pandemic, with an equal impact on COVID-19-related treatments and those unrelated to COVID-19, but impacted by supply disruptions.

Seventy-five percent of respondents agree that the pandemic has or will greatly increase problems with drug diversion, including theft and counterfeiting of critical products (such as test kits, vaccines and anti-viral medicines). As well, 70 percent of respondents agree that their supply chain is very vulnerable to suffering more problems with the continuation of the pandemic.

Stockpiling medications, transportation delays and increased costs were among the primary COVID-19 challenges after drug shortages. On-time, in-full (OTIF) delivery of medicines to patients and from suppliers had degraded by approximately 50 percent within the first few months of the pandemic.

Lack of visibility

Poor visibility and a lack of agility are inhibiting pharmaceutical supply chains from being resilient to any disruptions.

Visibility is limited and forecasting inaccurate, the study found. Sixty five of respondents can no longer accurately plan supply and 63 percent have lost faith in their demand forecasts.

Overall supply chain agility is limited. Nearly half (43 percent) of respondents say they lack the necessary agility and redundancy to survive major business disruptions.

Patient-centric supply chain transformation efforts are still not widely recognized as a priority for resilience. Only about six percent of companies are actively pursuing patient-centric transformation and only 14 percent are concerned about end-to-end visibility as a focus area in the supply chain.

Further collaboration

“Pharmaceutical supply chains are still struggling to adapt to the global COVID-19 pandemic and prioritize business planning for the future, a worrying concern as we face a possible third wave in this pandemic,” said Simon Ellis, program vice-president, supply chain strategies, IDC.

“When both demand and supply are erratic, supply chain agility becomes a critical capability to meet patient needs. Agility requires much tighter and more transparent holistic relationships with suppliers, and levels of collaboration that have not been consistently achieved in the pharmaceutical industry, largely because of the constraints in sharing accurate data.”